Landlords must know their Tenants’ rights to comply with the law.
Learn about tenants’ security deposit rights to avoid problems in the future.
What counts as a security deposit?
According to California Courts, a security deposit is any money a landlord takes from a tenant other than the advance rent payment.
There are limits on the amount of the security deposit:
- If the security deposit is for a residential property without furniture, the security deposit may equal two times the rent.
- The landlord may charge up to 3 times the rent for furnished units.
- There is no restriction on the security deposit amount for commercial property rental.
However, for residential rental units, typically, the landlord takes a security deposit equivalent to one month’s rent, assuming the renter’s credentials are flawless.
Return of security deposit
After a tenant moves out, a landlord has 21 days to:
- Return the tenant’s deposit in full, or
- Mail or personally give to the tenant:
- A written letter explaining why they are keeping all or part of the deposit,
- An itemized list of each of the deductions,
- Any remaining refund of the tenant’s deposit, and
- Copies of receipts for the charges/deductions, unless repairs cost less than $126 or the tenant waived their right to get the receipts.
- If a landlord can not finish the repairs within 21 days, the landlord can send the tenant a reasonable faith estimate of the cost of repairs. The landlord must send the tenant the receipts within 14 days of the repairs being done,
The landlord can withhold from the security deposit ONLY those necessary and reasonable amounts, and NOT a result of “ordinary and reasonable wear and tear.” For example, a landlord may not pay tenants for painting, new carpets, or curtains unless they are damaged beyond ordinary and reasonable wear and tear.
Note: If the property is sold while the tenant still lives there, the landlord is supposed to transfer the security deposit to the new owner.
Avoiding security deposit disputes
The landlord must attach a Move in/out Inspection checklist (MIMO) as part of the lease documents when tenants move in, and Tenants have up to 7 days to complete the inspection checklist after they move in.
We recommend photographing all rooms of the property and including all photos as part of the condition of the unit when tenants move in.
For any questions about how to handle move-in/out walkthroughs and inspections, please feel free to contact me.